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Multiple choice (5 Problems). Highlight the correct answer

#1. John Smith purchased 100 shares of XYZ stock at $40 a share. One year later, he sold the stock for $50 a share. He paid a broker a $32 commission when they purchased the stock and a $40 commission when they sold the stock. During the 12-month period he owned the stock, XYZ paid dividends that totaled $1. Calculate the Smith’s total return for this investment.

1. 30.3%
2. 22.7%
3. 32.7%
4. 25.5%

#2. As a stockholder of ABC, you receive its annual report. In the financial statements, the firm reported after-tax earnings of $5,200,000 and has issued 1,600,000 shares of common stock. The stock is currently selling for $36 a share.  What is the earnings per share for ABC?

1. $2.25/share
2. $0.29/share
3. $3.25/share
4. $0.70/share

#3. According to the “rule of 72,” a $2,000 investment earning 6% per year will double in

a.     3 years

b.    12 years

c.     8 years

d.    6 years

#4. Jane invested $52,000 in the Victorius Social Responsibility Fund. The management fee for this fund is 0.80 percent (ie, 0.8%) of the total asset value. Calculate the management fee Jane pays per year for this fund.

1. $416
2. 41,600
3. 41.60
4. 4,160

#5. Which type of fund can sell at a discount or premium to the net asset value?

1. Mutual Fund
2. Exchange Traded Fund
3. Closed End Fund
4. Money Market Fund